Stewart Yerton – Honolulu Civil Beathttps://www.civilbeat.org
Honolulu Civil Beat - Investigative ReportingWed, 19 Dec 2018 07:05:31 +0000en-UShourly1https://wordpress.org/?v=4.9.9Sylvia Luke Wants To Change The Way The State Spends Moneyhttps://www.civilbeat.org/2018/12/sylvia-luke-wants-to-change-the-way-the-state-spends-money/
Tue, 18 Dec 2018 10:01:26 +0000https://www.civilbeat.org/?p=1313486The leader of a key legislative committee overseeing the state budget is calling for major reforms in the way the Legislature spends money. Lawmakers should have more oversight in crafting performance measures the executive branch use to show how effectively it’s using taxpayer money, said House Finance Committee chair Sylvia Luke. State agencies currently set the […]

House Finance Committee Chair Sylvia Luke plans to push for major changes in the state budgeting process.

Cory Lum/Civil Beat

It would probably be 2020 before lawmakers could begin pushing through the sweeping changes, said Luke. But she hopes to begin laying the groundwork during the 2019 session that starts Jan. 16.

Luke’s call for greater accountability comes as Gov. David Ige presented his proposed budget for 2019 through 2021. And it presages a battle between lawmakers and the executive branch heading into the session.

Luke’s Senate counterpart, Ways and Means Committee Chairman Donovan Dela Cruz, did not return calls for comment. However, Luke said she had spoken to Dela Cruz and that he generally supports the ideas.

Ige was also unavailable for comment Monday, a spokeswoman said.

Gov. David Ige arrives at a press conference Monday to unveil his two-year budget plan. Luke wants to reform the system so that legislators have more spending oversight.

Cory Lum/Civil Beat

Luke has repeatedly pushed to get a better handle on government spending that bypasses the Legislature.

For example, in 2013 she helped push through legislation to stop the proliferation of special and revolving funds, which allow money to be steered straight to executive agencies without approval by the Legislature. State special funds, along with federal money, make up about half of the roughly $14 billion the state spends every year.

But attaching funding to meaningful performance measures may be the most ambitious change Luke has proposed. In theory, executive agencies already track how well they’re achieving performance goals in documents known as variance reports.

Critics say the system is full of holes.

Rachel Hibbard, a former Hawaii state budget analyst and government auditor, noted that the agencies set their own performance measures, the results of which they report themselves without third-party verification.

“Her idea certainly has merit in improving accountability,” said Hibbard, who now works for the California state auditor.

Marion Higa, a former longtime Hawaii state auditor, echoed the criticism of the current system.

“So many of the documents are just paper exercises,” Higa said of the variance reports.

Luke said she would like the Legislature to be more involved in setting the measures and verifying that the departments are meeting their goals as a condition of giving the agencies more money.

She pointed to early education. Ige on Monday proposed $200,000 in additional funding to staff the state’s pre-kindergarten program, and some $14.3 million for capital improvements to pre-kindergarten classrooms.

The governor said that research shows such programs produce better outcomes for students and save the state money in the long run. But he acknowledged the administration doesn’t have data on students now in the program.

The administration’s current measures of effectiveness focus more on how many students are participating and the number of qualified teachers than how well the program is educating children.

Luke noted the first group of students to go through the program will be in third grade this year and will take standardized tests. How well they perform, she said, will be a meaningful measure the state should look at when deciding whether to expand the program.

“I’m so rooting for those kids,” she said. “I just want the (Department of Education) to identify those kids.”

But challenging individual budget requests may be easier than making a sweeping reform to the process.

Higa, who was state auditor for more than 20 years, said the Legislature now has little “capacity to challenge what the executive puts forth as a measure of itself.”

To build that capacity would require funding and experienced people, Higa said. And it would have to be rolled out in phases.

]]>Ige Proposes Spending $125 Million For Ala Wai Canal Flood Controlhttps://www.civilbeat.org/2018/12/ige-proposes-spending-125-million-for-ala-wai-canal-flood-control/
Tue, 18 Dec 2018 04:21:35 +0000https://www.civilbeat.org/?p=1313516Calling the document a reflection of “the values we share as a community,” Gov. David Ige on Monday unveiled a proposed budget for the next two years that focuses on public education, housing and initiatives to protect the environment and promote agriculture. Among other highlights, Ige is looking for $315 million for affordable housing and […]

]]>Calling the document a reflection of “the values we share as a community,” Gov. David Ige on Monday unveiled a proposed budget for the next two years that focuses on public education, housing and initiatives to protect the environment and promote agriculture.

Among other highlights, Ige is looking for $315 million for affordable housing and $125 million in matching funds for a flood mitigation project on the Ala Wai Canal in Honolulu for which the federal government has already appropriated $345 million.

Although the state’s overall operating budget is more than $15 billion, only about $7.5 billion comes from general funds controlled by the Legislature and about half is taken off the top for big-ticket fixed costs like debt service, Medicaid, and health and pension benefits for state workers.

That leaves a relatively small amount of discretionary funds that Ige and legislative leaders will decide how to spend over the next several months.

Gov. David Ige said his proposal reflects “the values that we share as a community.”

Cory Lum/Civil Beat

Ige’s proposal, which he outlined at a Capitol news conference, includes about $400 million for education infrastructure improvements, $14.3 million to renovate pre-kindergarten classrooms and $6 million for school repair and maintenance.

In addition, the governor has proposed expanding a program that offers free community college tuition to low-income students. Ige is asking for $19 million for the endeavor, which is called the Hawaii Promise Program.

Also in the request is just over $10 million for watershed protection and $13.1 million for irrigation system improvements.

One of the biggest items aside from education is housing. Ige wants $315 million for affordable housing over the next two years, including $200 million to build rentals and $40 million for the Department of Hawaiian Home Lands to help pay for infrastructure needed to develop lands for Native Hawaiian beneficiaries. That’s on top of $15 million for homeless services.

High water levels due to king tides along the Ala Wai Canal last August, when Hurricane Hector was skirting Honolulu.

Cory Lum/Civil Beat

Rep. Sylvia Luke, chair of the House Finance Committee, said she had concerns with a number of requests. For example, she said, taxpayers doled out $235 million last session to develop rental housing. And she wants to know what happened to that before the state commits $200 million more.

Luke said she also had questions about the Ala Wai flood mitigation. She has had a testy relationship with Honolulu Mayor Kirk Caldwell over using state tax money to help finance the Honolulu rail project, and she questioned whether the state should pay for what she said is essentially another Honolulu city works project.

The $125 million request is about 10 percent of the total $1.3 billion capital improvements budget request, Luke said. Even if the state does foot the bill for the matching funds, Honolulu residents will have to pay for ongoing repair and maintenance.

“It’s going to be the city taxpayer who will have to pay for this, and they need to be up front about it,” she said.

]]>Experts: Kaneshiro Can Talk About Federal Investigation If He Wants Tohttps://www.civilbeat.org/2018/12/experts-kaneshiro-can-talk-about-federal-investigation-if-he-wants-to/
Thu, 13 Dec 2018 10:01:40 +0000https://www.civilbeat.org/?p=1312920When Honolulu Prosecuting Attorney Keith Kaneshiro issued a statement saying his office wouldn’t respond to a news report that he’s the target of a federal grand jury investigation, he did not merely decline to comment. Honolulu’s top criminal lawyer took it a step further and cited rules governing federal grand jury proceedings, implying that the rules […]

]]>When Honolulu Prosecuting Attorney Keith Kaneshiro issued a statement saying his office wouldn’t respond to a news report that he’s the target of a federal grand jury investigation, he did not merely decline to comment.

Honolulu’s top criminal lawyer took it a step further and cited rules governing federal grand jury proceedings, implying that the rules prohibited Kaneshiro from commenting.

Prosecutor Keith Kaneshiro has declined to say whether he’s a target of a federal investigation.

Cory Lum/Civil Beat

Kaneshiro issued the statement Tuesday after being publicly challenged to respond to published news reports that he had received a target letter from the U.S. Justice Department. Kaneshiro is caught up in a years-long federal investigation into public corruption and abuse of power that has already resulted in the indictment of former Honolulu police chief Louis Kealoha, his wife Katherine, who is a former deputy prosecutor, and four Honolulu police officers.

“Federal Rules of Criminal Procedure mandate that grand jury proceedings are secret,” read the document. “It is a violation of law for an attorney of the government, a grand juror, or others to disclose information about grand jury investigations.”

The statement added, “We do not comment on investigations any grand jury may or may not be conducting.”

In fact, there’s no rule that would prevent any target or witness from commenting, said Virginia Hench, a retired professor of criminal law at the University of Hawaii’s William S. Richardson School of Law.

Hench noted that Kaneshiro doesn’t have to comment, and she said she would probably advise him not to comment if he is the target of a federal investigation. But she said there’s nothing in the Federal Rules of Criminal Procedure that would prohibit him from talking about the matter.

Although grand jury proceedings are not open to the public like trials are, the general rule governing grand jury proceedings is that “no obligation of secrecy may be imposed on any person.”

However, the rule states exceptions to this general rule, listing several people who can’t talk about the grand jury proceeding. These include the grand jurors themselves, court personnel such as court reporters and “an attorney for the government.”

The question is, would Kaneshiro be considered “an attorney for the government” when he’s not acting as a prosecutor in the grand jury proceeding?

Kevin Cole, a professor of criminal law at the University of San Diego School of Law, said the rule doesn’t prevent Kaneshiro from talking about the grand jury proceeding if Kaneshiro is a target of the investigation.

“It sounds as if he’s misinterpreting the rule, unless he’s investigating himself, which would violate other rules,” Cole said.

Katherine Kealoha, a former high-ranking deputy prosecuting attorney for Honolulu, has been indicted on several counts of conspiracy and bank fraud.

]]>Why Has Wall Street Punished Hawaiian Airlines?https://www.civilbeat.org/2018/12/why-has-wall-street-punished-hawaiian-airlines/
Wed, 12 Dec 2018 10:01:17 +0000https://www.civilbeat.org/?p=1312720Hawaiian Airlines has had a bumpy ride on Wall Street over the last two weeks, with its stock price tumbling a staggering 24 percent after the company revised its revenue estimates for the fourth quarter. Shares of Hawaii’s dominant airline closed at just over $29 on Tuesday, down from $38 on Dec. 4, before the […]

]]>Hawaiian Airlines has had a bumpy ride on Wall Street over the last two weeks, with its stock price tumbling a staggering 24 percent after the company revised its revenue estimates for the fourth quarter.

Shares of Hawaii’s dominant airline closed at just over $29 on Tuesday, down from $38 on Dec. 4, before the company updated its revenue guidance. All told, the company’s market value has dropped by more than $400 million in recent days.

It’s not that business is bad for the Honolulu-based carrier, Hawaiian’s chief executive Peter Ingram and other senior executives explained during a nearly three-hour conference call with investors Tuesday.

The airline has a new fleet of planes, expanded routes and a joint venture with Japan Airlines awaiting regulatory approval. It also posted net income of $201.5 million on revenue of $1.96 billion during the first three quarters of 2018 – enough to spin off a nice dividend to shareholders.

Even with competition from low-cost Southwest Airlines scheduled to start soon, Hawaiian is flying high.

Hawaiian Airlines has a new fleet of Airbus planes, but Wall Street hammered its stock this week after the company said its current earnings forecasts were too high.

Cory Lum/Civil Beat

But the growth seems to have slowed, at least temporarily.

Specifically, Hawaiian expects its average prices for mainland flights for the end of 2018 to be lower than expected, while demand for flights to neighbor islands, mainly Hawaii Island, also softened. Chalk it up to increased competition, storms and the Kilauea volcano.

“It has been an unusual year,” Ingram said during the call from Hawaiian’s “Investor Day” meeting in New York. “We saw a lot of capacity come into the market last year. We expect there may be some more capacity coming next year competitively.”

Still, Ingram stressed that the company, which is one of Hawaii’s largest private employers with approximately 7,200 workers, plans to stay the course in 2019. The company in 2018 expanded service to include flights between places like Maui and Portland, Kona and Los Angeles and Lihue and Los Angeles, among other routes.

It plans to provide direct service from Honolulu to Boston starting in April. Hawaiian is the No. 1 carrier between Hawaii and the West Coast, with a 38 percent share of the market.

Ingram said Hawaiian will continue to exploit what it sees as its competitive advantages, which include its genuinely Hawaiian brand and the only route network centered in Hawaii.

“We will win with this strategy, and we’re going to execute it even better going forward,” he said.

Peter Ingram, Hawaiian’s chief executive, said the company has a winning strategy.

Cory Lum/Civil Beat

Still, losing more than $400 million in market value in a week is hardly a good thing. And while other airline stocks have lagged during 2018, Hawaiian has fared worse, Zacks Investment Researchreported.

The Motley Fool explained the situation succinctly: “Too many planes and too few passengers resulted in more empty seats failing to generate revenue for Hawaiian.”

More precisely, as Hawaiian explained it, here’s what happened: In October, Hawaiian had projected that its operating revenue per available seat mile for the fourth quarter might be up about 0.5 percent from the same time last year, but could also be down as much as 2.5 percent.

Sometimes referred to as “operating unit revenues,” operating revenue per available seat mile basically says how much revenue an airline produced based on how many seats it carried, whether full or empty, and for how many miles during a particular period.

But earlier this month, Hawaiian warned investors operating revenue per seat mile would be down considerably more than Hawaiian projected in October: 3 to 5 percent from the previous year.

The company attributed the change to lower-than-expected pricing for North American fares and lower demand for interisland flights.

During the conference call, Ingram elaborated, saying increased competition had driven fares lower and that a decline in demand for travel to the Big Island, caused by hurricanes and the Kilauea eruption, had an impact as well.

One issue not discussed during the call was Southwest. The discount carrier was expected to start service by the end of 2018; however, that now seems unlikely.

Earlier this week, the trade publication Flight Global quoted a Southwest official as saying it was close to getting regulatory approvals for the service, but there’s been no official announcement.

Southwest has said it will fly to Oakland, Sacramento, San Diego and San Jose, and provide inter-island service.

]]>Can A New Generation Save Honolulu’s Oldest Natural Foods Store?https://www.civilbeat.org/2018/12/can-a-new-generation-save-honolulus-oldest-natural-foods-store/
Mon, 10 Dec 2018 10:01:51 +0000https://www.civilbeat.org/?p=1311944When Kokua Market, the natural foods emporium on King Street, was founded nearly 50 years ago as a nonprofit organization, it had a clear vision: not just to sell organic produce and exotic whole grains, but also to be an alternative to the corporate business establishment. Now, with organic products and niche grains widely available […]

]]>When Kokua Market, the natural foods emporium on King Street, was founded nearly 50 years ago as a nonprofit organization, it had a clear vision: not just to sell organic produce and exotic whole grains, but also to be an alternative to the corporate business establishment.

Now, with organic products and niche grains widely available in stores like Wal-Mart, and even McDonald’s starting to serve quinoa, a new generation of idealists is attempting to save Kokua Market from oblivion.

Jesse Cohen, Kokua Market’s acting general manager, said the market’s financial situation is precarious, but that it has plenty of support.

The store needs almost $30,000 a month just to pay rent and taxes and keep the lights on, said Doorae Shin, a 26-year-old board member. To lower costs, Kokua Market has cut its staff of 40 to a skeleton crew augmented by volunteers. Its 27-year-old chef, Allyee Jepma, is cooking on a shoestring budget using donated ingredients.

The market’s long-term plan isn’t clear. A farm-to-table café is nearly a certainty, Shin said. So is the general idea of being a retail food hub for local brands like Kunoa Cattle Co. and SKY Kombucha, as well as local farmers, she said.

Kokua Market also has a big kitchen it could lease to small businesses and food trucks, she said.

But whether Kokua will keep trying to compete with full-service grocery stores isn’t clear. Even the future of the bulk bins – the iconic symbols of natural food stores – isn’t certain.

“It’s becoming a blank slate for investors who see the potential,” Shin said.

Kokua Market’s decline is a sign of the times, said Dave Gutknecht, who edits a magazine published by the Cooperative Grocer Network, a national consortium of grocery cooperatives.

With once-exotic whole grains and organic fruits now commonplace in supermarkets as well as Amazon’s ubiquitous Whole Foods Market stores, such products are no longer specialty items that draw customers.

That’s been bad for the small retailers that were once the hippie vanguard of the natural foods movement, said Gutknecht.

“After breaking open the market,” he said, “they’ve become victims of their own success.”

‘Don’t Trust The Man’

Exactly who started Kokua Market isn’t clear, said Laurie Carlson, the market’s former general manager who later founded the Honolulu Weekly newspaper. What is clear, from business records, is that it was registered in late 1970 as Kokua Country Foods Cooperative.

“It was a hippie store, but we were more surfer hippies,” said Bill Saunders, a Honolulu lawyer who was one of Kokua Market’s early supporters.

Laurie Carlson, in green, pictured with a crew from Kokua Market in 1981, recalls the store’s heyday, when “stock just flew off the shelves.”

Laurie Carlson

The first location, on Piikoi Street, was staffed largely with volunteers and had a piano in the front of the store, Carlson said. The market later moved to the corner of Beretania and Isenberg streets, where India Market now is located.

“It was a small store, but the stock just flew off the shelves,” Carlson said. “It was really busy.”

And it was about more than merely selling food, said Rick Bernstein, a longtime Honolulu yoga teacher who also was one of the early volunteer managers. It was also about defying authority, thumbing their nose at the establishment.

“Even if you could get brown rice at Foodland, it was ‘Don’t trust The Man,’” he said.

By the early 1980s Kokua Market reformed as a customer-owned cooperative under a newly passed Hawaii statute that Carlson helped get through. One section of the law codified the egalitarian ethic places like Kokua Market stood for, mandating that each “member of an association shall have one vote and one vote only” when electing directors.

There was no way for “The Man,” or even one well-intentioned investor, to take control of the company or buy seats on the board.

In 1991, around the time Carlson was starting the Honolulu Weekly, Kokua Market moved to its current space on King Street. Despite increased competition from places like Whole Foods and the multi-store Down To Earth market, Kokua Market stayed in the black until a few years ago, Carlson said.

More recently, the market has suffered disruptions from a gleaming new student apartment tower called Hale Mahana that’s been built next door. What might have been a boon for the grocer has turned into a problem because of construction traffic, Cohen, the current general manager, said.

The market is trying to negotiate with its main grocery vendor, United Natural Foods Inc., to craft a plan to pay off its debt, Cohen said. But the market needs a business plan to present to the creditor, he said.

The Kokua Market needs more than $30,000 per month to keep its operations going and only has a skeleton staff still working there.

Cory Lum/Civil Beat

Meanwhile, Kokua Market is clearly on life support.

On a recent afternoon, Cohen was operating the cash register, ringing up groceries for a trickle of customers. Jepma was in the deli, presiding over steam tables of lentil stew and sweet potatoes with Kirsten Biondi, a volunteer who said she feels compelled to help save the market.

Biondi said she could remember shopping at Kokua Market in the 1970s and assumed it would always be around.

“I’ve totally taken it for granted,” she said. “I’m repenting.”

‘A Chunk Of Cash’ Needed

There’s no shortage of support.

Carlson, who has a management degree from Yale, said she and Saunders are hoping to take a deep dive into Kokua’s books to figure out what went wrong. And Carlson said she’s reached out to the Big Island’s Kohala Center, a community economic development organization, to provide pro bono consulting.

“It will take a chunk of cash,” Carlson said. “I don’t know what that number is.”

A GoFundMe campaign has raised just more than $22,000 toward its $150,000 goal. But a deep-pocketed supporter has yet to step up, despite appeals in the media.

Among other potential investors, Kokua Market has reached out to the Ulupono Initiative, a Hawaii-based social investment firm focused on renewable energy, local food production and waste management. In a statement, Ulupono said Kokua Market’s commitment to fresh, local products aligns with Ulupono’s mission and that the organization is in talks with the market.

“However, any successful solution must address the market’s current challenges and its ability to be financially sustainable over time,” Ulupono said.

Gutknecht, the editor of the Cooperative Grocer Network magazine, said small natural grocery cooperatives can still succeed in the face of increased competition, by emphasizing their local ownership and commitment to local products.

Still, even if Kokua Market can craft a viable business plan, why would an investor provide a big chunk of cash to save the venture, knowing the investment would amount to just one vote among thousands when deciding how to run the company?

“Why you would do it is you believe in what the coop is doing,” Gutknecht said.

There’s a new generation that believes in what Kokua is doing.

“That whole young group of people are exemplary,” Bernstein said. ”But they’ve also got to create a viable business model that could have enough volume to pay the bills.”

The Ulupono Initiative was founded by Pierre and Pam Omidyar. Pierre Omidyar is the CEO and publisher of Civil Beat.

]]>New Shipping Rules May Drive Up Hawaii’s Power Billshttps://www.civilbeat.org/2018/11/new-shipping-rules-may-drive-up-hawaiis-power-bills/
Mon, 19 Nov 2018 10:01:41 +0000https://www.civilbeat.org/?p=1308690Hawaii residents already paying the nation’s highest rates for electricity soon may see a sharp increase in prices because of international regulations for ships set to go into effect in 2020. That’s the conclusion of Shasha Feharaki, a Honolulu-based energy analyst. The issue: the world’s ships soon will be required to use low-sulfur fuel oil, […]

]]>Hawaii residents already paying the nation’s highest rates for electricity soon may see a sharp increase in prices because of international regulations for ships set to go into effect in 2020. That’s the conclusion of Shasha Feharaki, a Honolulu-based energy analyst.

The issue: the world’s ships soon will be required to use low-sulfur fuel oil, which Hawaii also uses in power plants to produce electricity.

“We’re basically going to be competing with ships all over the world, and there’s not a lot of this stuff,” said Fesharaki, who is executive vice chairman of Facts Global Energy of Honolulu.

Dan Eberhart, the chief executive of the oilfield services firm Canary, recently explained it this way in Forbes: “Fundamentally, the rule threatens to leave refiners with roughly 2 million barrels a day of unmarketable fuel oil, while shippers would be short the same amount of compliant low-sulfur fuel.”

The effect on Hawaii’s economy is not clear.

Officials with the Hawaii Department of Business Economic Development and Tourism have not analyzed the projected impact, said Alan Yonan Jr., a spokesman for the Hawaii State Energy Office.

But, citing data from the U.S. Energy Information Administration, Yonan noted there’s been a significant decline in the consumption of low-sulfur fuel oil in Hawaii in recent years, particularly in the amount of low-sulfur oil used for electricity generation.

Statewide consumption declined from 11 million barrels used to produce power in 2008 to about 8.4 million barrels in 2016.

That’s still a lot, Fesharaki says. It’s enough, in fact, to have an impact on the pocketbooks of Hawaii residents if the price of low-sulfur oil rises, Fesharaki said.

The world’s shipping fleet must start using low sulfur fuel oil starting in 2020, according to international regulations. That is likely to drive up costs for the fuel and potentially impact costs for electricity.

Cory Lum/Civil Beat

Fesharaki likened the situation to a period following the 2011 Fukushima nuclear accident in Japan, which led to a temporary nationwide shutdown in Japan’s nuclear facilities and an increase in the use of low-sulfur fuel oil. Prices spiked as Japan drove demand.

A chart of historical price data produced by Facts Global Energy illustrates that trend. The price of low-sulfur fuel oil on Oahu generally hovered above the price of benchmark Brent Crude oil starting around 2008, when the low-sulfur oil commanded a $10 premium per barrel over Brent, the data show. But the price rose as high as $30 per barrel in 2014 in the wake of Fukushima.

The current price of low-sulfur fuel oil has dropped almost even with Brent, FGE’s data show. But the firm projects a spike a 2020, when the shipping regulation goes into effect. It expects prices to stay about $20 per barrel higher than the benchmark crude oil.

Hawaii’s electric utilities are allowed to pass on the increased fuel prices to consumers. As a result, Fesharaki predicts a 20 percent increase on top of what are already the nation’s highest prices for electricity.

A home that now pays $200 per month for electricity will pay about $240, Fesharaki said, or about $480 more over the course of a year.

Data from Facts Globa, Energy, a Honolulu-based international energy research firm, show the historical price of low-sulfur fuel oil versus the benchmark crude oil price. The firm expects the price of low-sulfur fuel to spike in 2020 and stay elevated for years.

Facts Global Energy

Jim Kelly, Hawaiian Electric Cos. vice president for corporate relations, said the impact will depend on a number of factors, including demand for shipping fuel in Asia and how much progress Hawaii makes in its push to renewable energy, like solar and wind.

Price For Solar Dropping

In addition, impacts to consumers will be mitigated by a recent change in Hawaii’s policy regarding fuel surcharges.

Earlier this year, the Hawaii Public Utilities Commission ordered that Hawaiian Electric would have to assume some of the risk of fuel price increases. Under the June 22 order, HECO will bear 2 percent of the risk, up to $2.5 million, and consumers 98 percent.

At the time, Melissa Miyashiro, Blue Planet Foundation’s chief of staff, called the PUC’s decision “a victory for consumers, clean energy, and common sense.”

“It requires our electric utility to share in the costs of its fossil fuel reliance and gives it some ‘skin in the game’ to move away from fossil fuels to clean energy,” Miyashiro said in a statement.

Fesharaki agreed Hawaii can offset any fuel cost increases by switching to renewables. The question is whether the state can do so fast enough.

Although headquartered in Honolulu, Fesharaki’s organization, FGE, has a global footprint, with 35 analysts in Singapore and 20 in London. FGE’s chairman and Shasha’s father, Fereidun Fesharaki, is a longtime energy expert who represented the government of Iran at OPEC conferences before the 1979 government overthrow that established Iran as an Islamic theocracy.

The company has expertise in the natural gas market research, including liquefied natural gas, the younger Fesharaki said.

Although natural gas is relatively inexpensive and cleaner burning than oil and coal, Hawaii has opted not to import liquefied natural gas as a transitional fuel as it moves toward its goal of producing 100 percent of its electricity from renewable resources by 2045.

Environmentalists say mining and transporting natural gas result in leakage of methane, a greenhouse gas, which outweighs the benefits of burning natural gas instead of coal or oil to produce electricity.

There is one, perhaps unintended benefit of the increase in fuel prices, Fesharaki said: it will make it even more competitive to produce electricity with renewables.

HECO’s Kelly said the price for solar power is dropping to 10 cents per kilowatt hour, which is almost as low as what HECO pays for power from a coal-fueled plant at Barber’s Point. And prices for renewables keep getting lower.

Fesharaki said it’s important for the government and regulators to understand the potential impact of the IMO regulations.

But he added, “Maybe they don’t care because this is going to make alternative fuels even more competitive.”

]]>Rushing To Mine A Sea Floor Full Of Treasure — And Unique Creatureshttps://www.civilbeat.org/2018/11/rushing-to-mine-a-sea-floor-full-of-treasure-and-unique-creatures/
Mon, 19 Nov 2018 10:01:10 +0000https://www.civilbeat.org/?p=1309356Deep on the floor of the Pacific Ocean, amidst one of earth’s greatest unexploited reserves of valuable minerals, are ecosystems of otherworldly creatures. There are fast-moving sea urchins; anemones that perch like flowers atop long sponge stalks; translucent, tentacled sea cucumbers that look like something from Pokemon, and yellow gelatinous critters that University of Hawaii […]

]]>Deep on the floor of the Pacific Ocean, amidst one of earth’s greatest unexploited reserves of valuable minerals, are ecosystems of otherworldly creatures.

There are fast-moving sea urchins; anemones that perch like flowers atop long sponge stalks; translucent, tentacled sea cucumbers that look like something from Pokemon, and yellow gelatinous critters that University of Hawaii oceanographers have nicknamed “Gummy Squirrels.”

This swath of ocean between Hawaii and Mexico for years has been the focus of a United Nations agency, not because of the region’s psychedelic aquatic life, but because of its enormous mineral wealth. The floor of the Clarion Clipperton Zone, as the area is known, is scattered with billions of rock-like nodules containing valuable metals.

It soon may open up to mining.

The Gummy Squirrel, also known as Psychropotes longicauda, is one of the otherworldly creatures living in the Clarion Clipperton Zone, which also contains a vast supply of metals like cobalt, which is used for electric car batteries.

“But,” Lodge said, “the pace of activity has increased dramatically over the past several years and we are seeing rapid development in all sectors of the industry.”

Lodge’s stated goal is to have exploitation regulations in place by 2020.

While the tension between mining and conservation is nothing new, the stakes are unusually high because of the potential size of the resource, the number of international firms involved and the remoteness of the site.

The minerals on the ocean floor include substances like copper, manganese, cobalt and nickel, which are used in many of the consumer products driving the 21st century economy, like batteries for cars and cell phones, as well as steel.

The concern is that exploitation regulations will fail to protect the environment. Current regulations allowing mineral exploration are inadequate, some legal scholars say, in part because the definition of “exploration” is ambiguous.

“They’re using ‘exploration’ as a veneer to go in and do what they want,” said Andres Tobar, a third-year student at the University of Hawaii, William S. Richardson School of Law, who’s part of a three-student team working on a law review paper on the regulations.

“The Clarion Clipperton Zone probably is the most pristine wilderness on the planet,” said Craig Smith, a professor of oceanography at the University of Hawaii Manoa, who recently led a month-long expedition to research the zone’s abyssal plain some 4,000 to 5,000 meters below the ocean’s surface.

“If there’s a pristine environment on the planet, this is it.”

There’s a simple reason firms have lined up to collect the nodules, despite the regulatory hurdles and technical challenges of working more than two miles below the ocean’s surface. Kris Van Nijen, who runs deep-sea mining operations for Belgium-based Global Sea Mineral Resources, earlier this month explained the appeal of mining the deep ocean to The Economist.

“For the same amount of effort,” he said, “you get the same metals as two or three mines on land.”

Below: Lockheed Martin explains the technology it has developed to collect manganese nodules from the ocean floor

Scientists have known about manganese nodules since the late 1800s, when they were collected during a British expedition. But, according to the U.S. Geological Survey, it wasn’t until the 1950s that the nodules became the focus of economic interest.

The Clarion Clipperton Zone is considered the area of the greatest economic potential because of the dense distribution of nodules with high concentrations of valuable metals, according to the USGS.

The zone is located in international waters, which means it is governed by the United Nations Convention on the Law of the Sea. In 1994, the UN set up the International Seabed Authority to manage and mine the ocean minerals.

Attracting Global Companies

In a report last week, the Financial Times of London estimated the seafloor contains 121.5 million metric tons of cobalt, nearly five times the 25.5 million on land. Proponents of ocean mining say it’s safer than land-based mining, pointing to reports of child labor being used to mine cobalt in hazardous conditions in the Democratic Republic of Congo, the main terrestrial source of the material.

The ocean resources bearing metals include parts of the ocean crust and undersea rock formations, but the nodules get the most attention because they’re just lying on the ocean floor.

The metals rush involves companies from economic powerhouses like China, Japan, Germany, the UK, France, India and South Korea, as well as developing nations like the Cook Islands, Tonga and Kiribati, all of which have contracts to explore the Clarion Clipperton Zone for nodules.

The United States is not a member of the UN Convention on the Law of the Sea and therefore is not eligible for a contract.

The technology to mine the nodules already exists, the companies say. For example, a London-based unit of Lockheed Martin, the U.S. military contractor and aerospace company, is working with two enterprises that have exploration contracts: UK Seabed Resource Ltd.and Ocean Mineral Singapore Pte. Ltd.

One possible method is outlined in an animated Lockheed Martin explainer video featuring a massive yellow collector vehicle. The film shows a fleet of the 100-ton machines sweeping nodules and piping them to a support ship, which takes them to a processing facility.

The video makes it all seem innocuous, like giant iRobot Roombas sweeping the floor.

But, says Smith, the UH oceanographer: “It’s not just picking up dust in your carpet. It’s picking up nodules and the whole habitat.” And charismatic creatures like Gummy Squirrels. Lockheed Martin did not return phone calls.

Meanwhile, the International Seabed Authority appears intent on moving forward. Driving the push is Lodge, the authority’s general-secretary. A British barrister with a master’s degree in maritime policy from the London School of Economics, Lodge has cast the unease among environmentalists as a product of misunderstanding.

“This unease may be in part attributable to the word ‘mining’, which conjures up images of destruction taken from controversial practices ascribed to some land-based operations,” Lodge wrote in an October 2018 article in the mining journal Elements. “When this is juxtaposed with the popular − but alas erroneous − image of the deep seabed as a pristine wilderness, then alarm does result.”

Lodge was more pointed in his September speech to the business club of Hamburg, Germany, which is the home of the world’s ocean court, known as the International Tribunal of the Law of the Sea. The popular perception of deep sea mining is “increasingly subject to wildly inaccurate and distorted scenarios portrayed by some sections of the media and interest groups,” Lodge said.

“Suggestions that deep seabed mining will inevitably cause large-scale irreversible damage and ecosystem collapse,” he said, “appear to be grossly exaggerated and lack any basis in fact.”

Some Are Dubious Of The Prospects

Despite such rhetoric and a flurry of recent press, some doubt that ocean mining is imminent.

Allen Clark, director of professional development for Honolulu’s East West Center, is the founder and former director of the International Institute for Resource Development and has worked as consultant to international economic development entities like the World Bank, U.S. Agency for International Development and the Asian Development Bank.

Clark, who started his career as a geologist exploring the jungles of Papua New Guinea for copper, predicts it will be at least a decade before the regulatory framework is fully set up. He said ocean mining is technically feasible and “marginally profitable.” But he questions whether companies will ever be allowed to mine the ocean floor.

Will creatures like this sea cucumber upend development of one of the world’s greatest untapped natural resources?

Craig Smith/University of Hawaii

He pointed to the discovery years ago of a deep-dwelling ocean octopus that got the nickname Casper. The discovery of such animals can be the death knell of mining projects, he said.

“If you think for a minute you’re going to be able to go down and tear up the ocean floor and disturb all those cute little Caspers, you’re out of your mind,” he said. “The chance is somewhere south of zero.”

]]>Hawaii Democrats Cheer New Balance of Power In Washingtonhttps://www.civilbeat.org/2018/11/hawaii-democrats-cheer-new-balance-of-power-in-washington/
Wed, 07 Nov 2018 10:01:02 +0000https://www.civilbeat.org/?p=1307887As his fellow Democrats across the nation reclaimed a majority in the U.S. House of Representatives on Tuesday, Honolulu Mayor Kirk Caldwell stood on a stage with Hawaii’s newly re-elected Democratic Gov. David Ige and newly elected Lt. Gov. Josh Green and promised that taking back the U.S. House was just the first step. “We’re […]

]]>As his fellow Democrats across the nation reclaimed a majority in the U.S. House of Representatives on Tuesday, Honolulu Mayor Kirk Caldwell stood on a stage with Hawaii’s newly re-elected Democratic Gov. David Ige and newly elected Lt. Gov. Josh Green and promised that taking back the U.S. House was just the first step.

“We’re building that foundation to make a difference,” Caldwell said, his voice and hand rising triumphantly before the packed ballroom at Honolulu’s Dole Cannery.

“We’re going to take the Senate back,” he said. “And we’re going to take the country back.”

Caldwell’s theme of taking back the country was a recurring motif among Hawaii Democrats on Tuesday. It wasn’t simply that the candidates from the nation’s bluest state had swept the statewide elections, as predicted. Equally energizing was the news that voters on the mainland had rebuked Republican President Donald Trump and won the House.

It was a celebration of one of the fundamental tenets of U.S. democracy, a three-branch government designed to provide checks and balances against one another.

“At least there is a check on our runaway president,” said U.S. Sen. Mazie Hirono, who handily beat Republican Ron Curtis to reclaim her seat.

Newly elected U.S. Rep. Ed Case echoed the idea, saying, “the first order is realistic checks and balances on the president.”

A giant television screen at the celebration for Hawaii Democrats on Tuesday night flashed the news that the party had taken control of the U.S. House.

Cory Lum/Civil Beat

It was hardly a complete win for the Democrats. The GOP expanded its majority in the Senate, and in doing so assured the party can continue to initiate legislation and push through Trump’s judicial nominations.

But by taking the House, the Democrats are now positioned to block high-profile Republican initiatives, like President Donald Trump’s promise to overturn the Affordable Care Act and build a wall along the U.S. border with Mexico.

House committees also will be able to conduct investigations, call for Trump’s tax returns and potentially even impeach Trump, although the Senate still would have the power to convict or acquit the president if the House did impeach him.

Case said the he hopes he and his fellow House freshmen will bring a new tone to governing, providing checks and balances but not simply obstructing for the sake of obstructing.

Ed Case, who won his race for Congress in a rout, told his fellow Democrats Tuesday that “the first order is realistic checks and balances on the president.”

Stewart Yerton/Civil Beat

“Let’s find a better way forward,” Case said. “We have an opportunity to take some baby steps that will get us back to the habit of leading. And I hope we don’t waste that opportunity.”

Even with a Republican majority in the Senate, U.S. Rep. Tulsi Gabbard, another Tuesday winner, said there’s a chance to push through legislation. She pointed to criminal justice reform as a case in point.

“On some issues there are opportunities,” she said. “On others it will be more challenging.”

Good News For The GOP, Too

Republicans, meanwhile, applauded their continued control of the Senate.

“We never believed wholly in the ‘blue wave,’ because the Republican National Committee had an intense ground game for this election,” said Miriam Hellreich, the national committeewoman for the Republican Party of Hawaii, speaking at her party’s headquarters at 725 Kapiolani Blvd on Tuesday evening.

“I would have been surprised if the tsunami happened that the Democrats predicted.”

About 50 Republican Party supporters gathered inside the room, noshing on potluck food and watching a mounted television screen for election results as a life-size cutout of President Trump stood to the side.

Republicans gathered at an election party at GOP headquarters weren’t too alarmed about Democrats gaining control of the House, with one calling it just a “blue splash.”

Ronen Zilberman/Civil Beat

The mood was convivial but not too rowdy as Republican party members — mostly skewing on the middle-aged to older side, with several donning red “Make America Great Again” baseball caps — discussed their continued support for Trump’s policies, including tax cuts, a tougher immigration stance and directions on national security.

They spoke with enthusiasm about the state of the country over the last two years, and didn’t seem perturbed by the Democrats capturing the House majority on the national front.

“We were promised a blue wave, and I think it’s a blue splash, so we’re feeling good,” said Nick Ochs, 32, director of the Young Republicans of Hawaii.

“I don’t think (either party) is incredibly stunned tonight,” he added. “This is more or less what conventional wisdom said would happen.”

Beverly C. Sutton Toomey, left, reacts to the news of the Republicans keeping their hold on the U.S. Senate.

Ronen Zilberman/Civil Beat

A handful of Republican candidates mingled in the crowd, including Cam Cavasso, who lost the U.S. House 1st Congressional District race to Ed Case; Marissa Kerns, Republican candidate for lieutenant governor; and Diamond Garcia, who at age 21, tried to defeat Maile Shimabukuro for state Senate District 21.

Shirlene Ostrov, Hawaii Republican Party chairwoman, said she was encouraged by the turnout at the watch party, adding that her goal is to continue to unify the Republican Party in Hawaii — the country’s bluest state – something that is “not going to happen overnight,” she said.

“What I’m excited about is this excitement,” she said, gesturing at those in the room. “People I’ve never seen before are volunteering.”

After his stirring speech to the Democrats, Caldwell came down from the stage to pose for pictures with supporters and talk to the media.

The mayor echoed Case and others about the new balance of power. Caldwell said the House was unlikely to impeach Trump, even if the move proved warranted, simply because the Republican Senate would likely acquit him.

But back at the Democratic gathering, Caldwell said the very presence of a Democratic-controlled House changes things.

“I do think the president does have to have one eye on the House,” he said. “That’s a moderating influence.”

]]>Maui Voters Want Tougher Fines For Unlicensed Airbnbshttps://www.civilbeat.org/2018/11/maui-voters-want-tougher-fines-for-unlicensed-airbnbs/
Wed, 07 Nov 2018 05:29:51 +0000https://www.civilbeat.org/?p=1307620In a closely watched proposal to toughen penalties for operating illegal short-term vacation rentals, Maui voters were strongly favoring a measure to increase penalties for operating unpermitted short-term vacation rentals. The measure on Maui ballots would increase from the current $1,000 to up to $20,000 the amount a person could be fined for operating a short-term rental […]

The measure on Maui ballots would increase from the current $1,000 to up to $20,000 the amount a person could be fined for operating a short-term rental without a permit. The measure also would impose a $10,000 fine for each day the illegal rental persists. It also applies to Lanai and Molokai, which are part of Maui County.

Voters have a direct say in the matter because the Maui County Charter generally limited fines to $1,000, and amending the charter requires approval of the voters.

Voters approved/rejected a charter amendment that would have imposed penalties of up to $20,000 on owners of unpermitted short-term vacation rentals on Maui.

Airbnb

Specifically, the ballot asked voters, “Shall the Charter be amended, effective January 2, 2019, to increase the penalty for the operation of a transient accommodation without a necessary permit from the current $1,000 amount to a civil fine of up to $20,000 plus $10,000 per day for each day the unlawful operation persists?”

The proposal comes as Hawaii counties are struggling to deal with an explosion of unlicensed short-term vacation rentals.

On Oahu, for instance, there were approximately 8,500 short-term rentals being advertised online in August, according to Airdna, a site that provides market data for landlords wanting to rent out their properties. The vast majority were outside of the resort zones where the short-term rentals are allowed.

Public officials face a difficult task of balancing the need to enforce zoning laws with the growing popularity of online services like Airbnb and VRBO. Despite the obvious demand for such alternative accommodations, housing advocates say the rentals are taking away housing for residents and exacerbating already high rents.

Maui generally allows far more short-term rentals than Oahu, said Mike White, a councilman who is also general manager of the Kaanapali Beach Hotel. The vacation rentals are generally OK in the resort areas of Kapalua, Kaanapali, Wailea and Makena, White said. That results in some 10,000 permitted short-term rentals, he said.

“I think that’s great,” White said about the early results. “It will give us another tool in our toolbox for dissuading illegal vacation rentals in Maui County.”

Meanwhile, on the Garden Isle, Kauai voters were rejecting a proposal to eliminate term limits for County Council members. The Kauai County Charter limits council members to two four-year terms. But the Kauai County Council in March voted to give the electorate the chance to change that.

Council chair Mel Rapozo, vice chair Ross Kagawa and members Arthur Brun, Arryl Kaneshiro and Derek Kawakami voted in favor of letting voters weigh in on the measure, which was introduced by Kagawa. Council members Mason Chock and JoAnn Yukimura opposed it.

“What is good for the President of the United States, the Governor of the State of Hawaii, the Mayors of all counties in Hawaii, and the other County Councils in Hawaii should be good for the Kauai County Council, too,” Yukimura said at a March council meeting, explaining her opposition.

“Ironically, just a few days ago, China moved in the other direction and changed its constitution allowing the current leader to be President for life, and I do not think that is the right direction. I think it is healthy to rest after a certain period of service and I also think that an open-ended political incumbency is not healthy for society.”

Kagawa, meanwhile, had framed the issue as not about open-ended political incumbency, but about giving newcomers the chance to get elected.

“Do we need term limits to give new people the chance?’ he said. “I think the facts show that we do not need term limits.”

]]>Filmmaker Sues Hawaii: My Film Is ‘Not The History They Want Told’https://www.civilbeat.org/2018/11/filmmaker-sues-hawaii-my-film-is-not-the-history-they-want-told/
Mon, 05 Nov 2018 10:01:12 +0000https://www.civilbeat.org/?p=1307172Hawaii taxpayers have doled out tens of millions of dollars in recent years to help pay for productions like Steven Spielberg’s “Jurassic World,” Walt Disney’s “Pirates of the Caribbean: On Stranger Tides” and the game show “Wheel of Fortune.” The content of these productions had nothing to do with Hawaii, and none of the principal […]

]]>Hawaii taxpayers have doled out tens of millions of dollars in recent years to help pay for productions like Steven Spielberg’s “Jurassic World,” Walt Disney’s “Pirates of the Caribbean: On Stranger Tides” and the game show “Wheel of Fortune.”

The content of these productions had nothing to do with Hawaii, and none of the principal cast was Native Hawaiian, but the projects were made at least partly in Hawaii and thus qualified for state tax credits administered by the Hawaii Film Office.

Now an independent filmmaker who has made a movie telling a Hawaiian story, featuring what he says is a mostly Native Hawaiian and Polynesian cast, is crying foul. Tim Chey, producer and director of a historical drama about Hawaii’s Chiefess Kapiolani, an early Hawaiian convert to Christianity, says the state has refused to grant tax credits his film has earned.

Chiefess Kapiolani, played by the actress Teuira Shanti Napa, defies the Hawaiian volcano goddess Pele to show her Christian faith in the feature film “The Islands,” which is due in theaters in March.

Tim Chey/RiverRain Productions

Chey, who is also a Los Angeles attorney, filed suit in U.S. District Court in Hawaii. The complaint names Donne Dawson, the state’s film commissioner, Benita Brazier, a high-level economic development specialist, and the film office.

Dawson did not return calls from Civil Beat. Christine Hirasa, a spokeswoman for the Hawaii Department of Business, Economic Development and Tourism, declined to comment.

The complaint calls the film office’s actions “the most dishonorable” Chey has encountered in 22 years of making movies. In an interview, Chey said he’s dealt with film offices in Louisiana, Georgia, Florida and New Mexico.

“Here the filmmaker shot a movie that would honor a Hawaiian Chiefess, provides good-paying jobs to Hawaiian/Polynesians, and the Hawaii Film Office back-stabbed him by deceiving him and playing little juvenile high-school games no other film office of any state would dare to do,” the lawsuit says.

Chey’s film credits include a slew of inspirational, faith-based movies featuring accomplished actors like Stephen Baldwin, Malcolm McDowell and Cuba Gooding Jr. The movie in dispute, “The Islands,” stars the Oscar winner Mira Sorvino as a missionary who helps convert Chiefess Kapiolani to Christianity. It’s due in theaters in March, Chey said.

Chey’s suit includes claims related to a purported breach of contract involving the tax credits. It also alleges the film office discriminated against his film because it shows how a prominent Native Hawaiian helped establish Christianity in the islands in the 1800s. According to the suit, Chey received death threats from people who objected to the film’s content, which includes a scene in which Kapiolani defies the Hawaiian goddess Pele and descends into a volcano to test her newfound Christian faith.

At one point before production, the suit says, Chey received “a strange message” from an employee of the film office expressing concerns about the movie.

“This is a complete violation of Filmmaker’s 1st Amendment rights for a government agency to inquire about the content of a movie — it’s almost unheard of,” the suit says. “Imagine a California agency calling a Hollywood studio and ‘inquiring’ about the content of the horror movie ‘The Nun.’ The outrage would be worldwide. This is no different.”

“It’s not the history they want told,” Chey said in an interview. “But I’m sorry. It happened.”

Chey says he’s submitted all the required paperwork, including records of cancelled checks provided by Bank of Hawaii, but that the film office has nonetheless refused to honor his application.

For every dollar spent by productions like “Hawaii Five-0,” shown here, the state pays the producer 20 to 25 cents in refundable tax credits.

CBS

The suit comes just over a year after Gov. David Ige signed a bill extending the tax credit program, which is one of Hawaii’s most generous business tax incentives.

Although technically a tax credit, the incentive is effectively a rebate. Qualifying productions on Oahu get 20 percent of their production expenditures back from the state; films based on neighbor islands get 25 percent back.

The rebate applies to money paid to vendors located out of state as well as those in Hawaii. It also applies to all cast and crew, including nonresident, marquee stars and directors, who typically get housed in posh accommodations while filming and earn mammoth paychecks, all subsidized by Hawaii taxpayers.

According to the tax credit law, a spectrum of productions qualify for the incentive, including not just feature-length motion pictures and television series, but also commercials, music videos, interactive games and television series pilots. The law doesn’t say much about the content of qualifying productions, although they don’t include pornographic productions, local news shows and televised sporting events.

The program cost Hawaii’s general fund about $40 million in 2015, according to the Hawaii Department of Taxation’s 2017 report on tax credits. That was more than twice the $19.5 million in tax credits the state paid to landlords who provided affordable housing to low-income residents that year, the department said.

Starting in 2019, total movie rebates will be capped at $35 million annually.

Compared to the big rebates the state pays blockbuster movies and television series like “Hawaii Five-0,” Chey said his credit request is minuscule. He said he hasn’t drawn a salary for producing and directing the movie, so he’s not asking Hawaii taxpayers to subsidize his pay as they do other directors. Chey declined to say how much the movie cost to make, but said it was small compared to the big studio movies.

“They’re giving millions back to ‘Jurassic World,’” he said. “And they won’t even give us a bowl of porridge.”

Native Hawaiian And Polynesian Cast

Chey also said he’s tried to do the right thing in terms of casting at a time when producers making movies in Hawaii and elsewhere have been criticized for hiring Caucasian actors to portray Polynesian or Asian characters.

The director Cameron Crowe, for example, incited a storm of controversy when he cast Emma Stone as Allison Ng, a Chinese-Hawaiian character, in the 2015 movie “Aloha,” which was filmed in Hawaii.

“Dwayne ‘The Rock’ Johnson, Robert Zemeckis (director) and Randall Wallace (writer) are not Hawaiian,” Hawaiian activist M. Healani Sonoda-Pale wrote recently in Civil Beat. “They cannot adequately tell our story without tainting it with their own foreign lens and perspective. They can only disparage a great Hawaiian man.”

The movie is scheduled to open in theaters in March.

RiverRain Productions

Chey said more than 98 percent of his cast members are Native Hawaiian and Polynesian. Teuira Shanti Napa, who plays the lead role of Chiefess Kapiolani, is from Rarotonga and goes to college at Brigham Young University-Hawaii. Umi Perkins, a Harvard-educated Native Hawaiian scholar, co-wrote the script.

Chey shot much of the film at Kualoa Ranch on Oahu, he said. He used union actors, and although the crew was nonunion, Chey said he paid crew members as much as $500 to $700 per day.

Chey said he followed procedures outlined by the film office to qualify for the tax credits. He submitted a project registration form before production started, in October 2017, he said.

And he said he submitted a completed production report documenting expenditures after the movie finished filming, along with vendor lists and other documentation of expenditures.

Emails submitted as exhibits in the lawsuit show Brazier asking Chey to revise some documents, which Chey appears to do, according to the emails. But the emails indicate that a communication breakdown occurred in early 2018 and into the summer, as Chey wrote emails to Brazier and Margaret Ahn, a deputy attorney general, asking about the status of the rebate. The emails indicate that Chey was not getting a response from the film office.

“I cannot be treated any differently than ‘Jurassic World,’ ‘Kong: Skull Island,’ or any Hollywood movie,” Chey wrote at one point, showing increasing agitation at the apparent lack of response from the office. “I will subpeona and depose the producers of all the movies shot in Hawaii should we enter into litigation.”

Although Chey said he hasn’t started sending subpoenas to other producers to see how the film office treated their applications for tax credits, a 2016 audit of the tax credit program showed that the office has hardly been a stickler for detail when awarding credits to producers.

For instance, the audit looked at 25 productions the office certified for tax credits in 2014 and 2015 and found that the office approved seven project registration forms even though the forms were submitted after a deadline for submission. In one instance, the registration form was received more than a year late, the audit said. The audit also found the office accepted two production reports submitted after a 90-day deadline.

Chey said the audit report shows the office has been far more accommodating to other productions than they have been with him.